This is how to set up hourly total cost rate of employee (pay rate + overhead rate) in order to track costs per projects and clients.
- Click to “People” button in SET UP section of main many
- Click “Edit” for certain users from the list
- Fill cost rate field as that is suggested below
How to calculate total cost rate?
Hourly pay rate is usually agreed with employee by labor contract. Otherwise you can calculate this based on gross monthly salary. For example, if the total gross salary is $4.400 per month for 176 work hours, pay rate is $25. Overhead rate represent overhead costs allocation per employees. For example if the total overhead amounts $10.000 and total average work hours for all employees amounts 704 per month, overhead rate is 14.2$. Accordingly, total cost rate is $39.2.
You can enter only hourly pay rate instead of total cost rate in this set up. In that case, the software will calculate only gross costs per projects and clients. If you put total cost rate, the software will calculate total estimated costs per projects and clients.
Example of best estimated calculation (download table with formulas in excel):
The hourly rate can be changed at any time, but frequent changes are not recommended. It is recommended that the price per working hour can be updated annually or quarterly.